Wednesday, August 29, 2007

Gordon's Casino

So the City bonus boys are getting even richer and company directors need wheelbarrows to take home the cash they've looted from their shareholders. It's a funny old world this Labour Britain, even funnier now that it's run by a supposedly old Labour Prime Minister. I have no general, ideological objections to people making large sums of money, but I have two specific objections to the bonus boys and their hedge fund pals. First, they seem to be borderline sociopaths, capable of wrecking once decent restaurants.  Secondly, they - along with the non-doms who have flooded to London to exploit our tax haven status - have turned the central London property market into a semi-criminal casino; I speak from bitter experience. Company directors are just doing what they have always, in my experience, done - exploiting the supine complacency of shareholders. Of course, when challenged, all of these people will say this is simply the working of the market, evoking an amoral, though economically beneficial, abstraction lurking behind all their riches. They find this consoling because it appears to eliminate considerations of responsibility and justice. But it is nonsense. Politics is the real marketplace. For the success of London is nothing to do with any abstraction and everything to do with a political decision. Brown as Chancellor and, so far, as Prime Minister, has left the City alone and perpetuated our astonishingly generous tax regime for non-doms and company debt. Why has he - an old tax and spend socialist - done this? One answer that occurs to me is that, long ago, he decided that our best bet was to sustain our status as Europe's Hong Kong. This was made possible by our failure to accept the Euro and by Thatcher's labour market reforms. Unleashing our piratical financiers - and admitting plenty of overseas pirates -  was the obvious way to exploit this. It has certainly worked; indeed, it has probably sustained Labour in power by underpinning more than a decade of economic success and, crucially for the middle classes, the reassuring spectacle of rapidly rising property prices. As long as you are a property owner, you are better off for Brown and the bonus boys. But, I suspect, as a policy its days are numbered. Social tensions caused by the wealth disparity between London and the rest of the country are emerging. The world financial system on which London depends is unstable. The Americans are not going to stand by much longer watching the City steal business from New York. And, finally, a debt-laden electorate must ultimately notice the oddity of Mr Social Justice quietly approving the creation of a casino economy. Brown will know this; what he won't know, however, is what will drive the economy when he closes the casino.

17 comments:

  1. George Monbiot's book Captive State is very good on the perfidy and beastliness and failure and corruption and back-slapping and smarmy lying worthless fakery of New Labour. It looks, from Monbiot's book, that the fat old miner-types tried to do some good at first, then were quietly taken to one side by the Money, and had things explained to them, and thereafter, "meet the new boss, same as the old boss".

    i seem to remember Oswald Spengler back in 1917 saying that politicians in the modern world as just "agents for financial interests."

    And since they tend to only think 6 months ahead - or 4 years at most - they have no problems with suicidally stupid schemes, indeed if NL thought they were on the way out i can imagine them deliberately initiating long-term woes to befall their successors.

    They are slime.

    ReplyDelete
  2. It seems to me that politics has been sacrificed on the altar of free market capitalism. It's all very sad really and rather unedifying. To be course about it, the market is an incorrigible whore and politicians nothing but shifty pimps. The rest of us... well... we are left with an empty feeling.

    ReplyDelete
  3. Fine. But when was it any better? Perhaps we should return to the good old days of Nelson and Napoleon, laying claims to treasure and land because we were pretty damn good at fighting. Unfortunately there are no easy alternatives. However, it could be worse. We could be living in Macau.

    ReplyDelete
  4. Writing from Leipzig, once in the 'socialist' GDR - it occurs to me yet again that deep beneath what you discuss here Bryan is the moral collapse of socialism: the fact that even in GB's Labour world, THERE IS NO ALTERNATIVE. When the Wall came down in 1989, people wanted freedom: meaning freedom to shop. As the shock waves spread, and reshaped both our material worlds and our consciousnesses, the notion that (in Europe at any rate) we could IMAGINE anything different, that there might be alternatives to capitalism vanished. Whether you think you are on the left or right - or centre - this astonishing indeed tectonic change is the most vital event of recent history... Cue wheelbarrows of dosh.

    ReplyDelete
  5. A very good piece. I feel pretty depressed about the whole thing, not least the way house rising house prices wreck quality of life: every spare penny has to go to the bank on mortgage charges so we all become even more abjectly enslaved to the Man. Other European nations, with lower incomes but more stable house prices, live better than we do. But then we no longer seem to have any idea what quality of life means.

    I think you're too kind to Gordon, though, as it has really been Gordon and Tony's Casino. Tony has already grabbed as much as he can on the basis of worthless promises and departed for even richer climates, as will the non-doms and bonus boys the moment things turn chilly over here.

    ReplyDelete
  6. "As long as you are a property owner, you are better off for Brown and the bonus boys."

    Not sure about this. Like everyone else, property owners need somewhere to live; the fact that my house has gone up in value means nothing, as the house I want to move into has gone up in value too.

    The only people who materially benefit from rising property prices are those who engage in the sale of a home they don't own - ie. property developers, and people disposing of 2nd homes and buy-to-let homes.

    I suppose you can argue that the rising price of my property offers more opportunity to borrow against its value, and hence the opportunity for me to benefit materially ...

    ReplyDelete
  7. oops - should have put 'don't live in', rather than 'don't own' ...

    ReplyDelete
  8. might rising house prices be advantageous to those who choose to sell their house and move to a civilized country like France, where the girls are pretty & the violence is decorous & the politicians amusingly rather than tediously corrupt?

    ReplyDelete
  9. Neil, I think you're right.

    Chris H. -- I think the East wanted quite a bit more than freedom to shop. Have you seen "Lives of Others"? It's a must see on E. Germany before the wall came down.

    Why are real estate prices so high in England? Here in the U.S., prices are high in desirable cities or coastal areas, but you can still find a few acres & a house for $100,000 (50,000 lbs.) or less in the South and Midwest. And you can live in a palatial estate in those places for double the money.

    Aren't there still affordable areas of G.B.?

    ReplyDelete
  10. Brilliant piece. Bearing in mind the author, I wonder if it was knocked off in 30 minutes pre-breakfast? I would imagine many bloggers spend 60 minutes over their first sentence.

    ReplyDelete
  11. Nowhere anyone could bear to live, Susan - and much of London is both unbearable and ludicrously overpriced. The suburban demi-paradise in which I live (about half an hour out of central London) is seriously underpriced, which means only that you can still get a poky two-bedroom terrace house for less than £250,000 (getting on for ten times average annual earnings?). It's insane.

    ReplyDelete
  12. A masterly analysis, Bryan. I blame myself.
    Gordon

    ReplyDelete
  13. Thanks Gordon and Anon. But 30 mins! Any blog that takes longer than ten is an outrage.

    ReplyDelete
  14. hey, i took six hours to write one post. But it was six hours at work, where i kept having to minimize the window to pretend i was typing, and of course had to go for doughnut breaks, etc.

    ReplyDelete
  15. Susan B., intrigued by G.B. real estate,August 30, 2007 2:48 am

    Well, Nige, suburb of London I can imagine would be very pricy -- suburbs of NYC are the same way. But what if I wanted to buy a suburban house in Newcastle-upon-Tyne, say: Could I gt something for a reasonable amt. of dough -- say 100-150,000 lbs?

    ReplyDelete
  16. A house of a decent size in a nice suburb, no way Susan, even in Newcastle. It's not just a capital city thing. Getting a decent house you might actually want to live in is just shockingly expensive in the UK.

    ReplyDelete
  17. The first game I want to talk about is actually a charged up version of a player favorite - Mega Moolah. One of the most popular and largest progressive jackpot slots to be found at any online casino, Mega Moolah has paid out millions of dollars to players the world over (I can't believe I just said "the world over"...man I 'm getting old and know it. I suppose that's better than getting older and not knowing it).

    ReplyDelete